It is possible I am engaging in selective memory and not recalling a number of false reads on the market, but today, I was proven correct on my recommendation to go long on Starbucks (SBUX).
Every stock in my portfolio, except Starbucks, fell with the rest of the market. The major stocks indexes were all down around 1%, which essentially took back the gains acquired over this short trading week. The economy added jobs in October, 171,000 to be precise, but the expanding workforce drove the unemployment figure up to 7.9 from 7.8. To be absolutely honest, I am not sure if I would have interpreted the movement of stocks correctly if I had somehow acquired the unemployment figure before the public. I would have guessed financial analysts would have neglected the unemployment rate increase, because everyone knew the workforce figure has been artificially low for some time. I probably would have acted on that assumption rather than acting on simple market psychology. You learn something new everyday.
I was very surprised today when I logged into my account after looking at some of my stocks on Google finance, which were all down, and found that Starbucks had put my account in the green on its own. EPS came in at .46 Thursday afternoon, which beat the expected .45. The company increased the dividend, and the volume at 3-month highs sent the stock above its 50 day moving average. The gain of over 9% was especially groovy considering SBUX made up about 14% of my portfolio at the end of the trading session. I have big hopes over the next few years for Starbucks. A pullback is to be expected, but I do not intend to sell Starbucks in the near future.
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